has enormous impact on the ordinary citizens. ... . >> good morning everyone.

i'm from "the new york times". welcome to what i expect to be a unique opportunity to hear the biggest three people of our era. and between them they shared from the fomc they have those numbers so if you believe that monetary policy over the last 15 or 20 years if you think it isn't bad then you have people to blame. [laughter] and then with the federal reserve governor through 2014

after a similarly accomplished academic career served as the fed governor san francisco fed and the bank through 14 through 18. and then this doesn't sound like a joke what happens with 13000 and economist? since the fomc meeting the market has been volatile and we also saw a blockbuster job report this morning is that changing for your outlook or beyond quick. >> thank you very much it's great to be here as always and

then turned to the outlook that was a good year for the united states and most of what we see coming in and is solid with ongoing momentum through 2019 you mentioned the jobs report we have 312,000 payroll jobs added and unemployment remaining for nine months with the longest. since the sixties and labor force participation which is very welcome. because it does not raise inflation. and on a more forward-looking basis near those historic lows

that is a leading indicator and consumer spending and yesterday's institute for supply management report that came in well below expectations but the ism report with the manufacturing conditions and it was at a historically high level and now look that is consistent and is about at the level in the earlier years. that is worth the context and

the fact that it moved down so much in one month we are keeping an eye on. so notwithstanding that report and seem to be on track to sustain the momentum. talking about china for a second that has been a big part of the story and is seen pulling back and those reports that we got earlier and to expel - - spill over to the crisis such as copper for which china is a big buyer and then responding with the additional stimulus at a still solid pace so overall the picture for the rest of the world here in the united

states it's a good day looking in the rearview mirror about financial markets have been sending different signals of concern slowing global growth related to china or trade negotiations or let's call general policy coming out of washington so you could have a difference on the one hand with intention with the financial markets signaling concern and with those factors what about the outlook and monetary policy? when we get conflicting signals now there is no preset path or policy and with that

muted isolation readings as we see how the economy evolves it shifted significantly to promote the statutory goals and to point that recent example and i mention this and as many of you recall december 2015 the meeting of the fomc participant for those for rate increases but very early in the year and under the leadership and they flexibly adjusted the expected rate path we did raise rates one year later in december 2016

and then whether the soft patch in 2016 then got back on track with gradual policy. now nobody knows what will be like in 2016 but what i do know is we are prepared to addressed policy quickly to use all the tools should that be appropriate and to keep the labor market strong and i will stop there. . >> since the markets have moved with those features to even have cuts in 2019. >> the markets are pricing in and with the labor market data so markets are expressing

concerns of global growth and those that are related to that and that we are listening carefully that the markets are sending and to take those downside risks into account making policy go forward. >>. >> and to continue shrinking at a steady rate. >> and some years ago we decided that rate policy would be the active tool and should not be allowed to shrink predictably or gradually in the background that is as interesting as watching paint dry. . >> so that division of labor

has served the economy well and we also set at the very beginning from what i was involved in to adjust the normalization plans so if we ever came to the conclusion that any aspect was somehow interfering with the achievement we would not hesitate to change that that would include the balance change certainly so we hear from different groups of people and the role that the normalization may be playing in the market and we are of the view when those treasury issues they do so across the

yield curve they haven't been that big. we don't believe that issuance is an important part of the market in the fourth quarter last year but to say again with a different conclusion we would not hesitate to make a change and that the balance sheet normalization is part of the problem we wouldn't hesitate to make a change. >> that is the longest on record and how confident are you the economy is on track to grow through 2019 quick. >> i agree that the data suggest we have a pretty strong economy that spending

is all two thirds of the spending of the economy was strong job growth and income growth and substantially to put money into consumer's pockets with consumer spending and that is a strong base for the economy next year. i think that expansion is ripe old age and plan is the financial imbalance and normally when it ends the recession and then they need to tighten to bring it down

and with inflation being low and to be stable in the sense that there is a linkage between the labor market and the credit market and the treasury but the strength of that language isn't very great so the phillips curve is the way to do that and inflation expectations and it gives the former colleagues the opportunity to manage the risk and then to see those financial imbalances.

and with those financial conditions and with that downside risk and to see the slowing of the global economy. and the potential of which of the label markets and then to find ourselves in a bad spot are we looking at that now? . >> we have an excellent chance to break the all-time record for the expansion now it will grow more slowly in 2019 and maybe even more slowly than

2020 so now those policies in particular from the starting point barring changes of the law would be dying down over time and financial conditions to some extent is a take back with some concerns but then of course, that confluence of synchronize that has been globally so all these things do suggest some moderation but like a ripe old age you get murdered instead. [laughter]

right now we don't see anybody hiding behind the curtains but we just say that but they have that ability to respond that is responsive to the data or the markets and manages the risks on both sides. >> as you know, all too well with that political system that is good for your successor if you are unhappy with those rate increases they try to fire you have you received anything from the white house? about the discussion of any

change of your job? . >> no i have not. [laughter] if invited would you accept that quick. >> i have no news on that there is nothing scheduled but i would say the meetings between presidents and press chairs happen but i cannot think of any fed chair that did not but nothing has been scheduled and i have no reports. >> of the president asked you to design - - to reside would you do it quick. >> no. [laughter] . >> doctor ben mackie - - burning key from the fed chair how does your interaction work when it works well what happens quick.

>> i had a great relationship with president bush who initially appointed me and i worked with him in the white house for a time and also president obama who reappointed me and both were very respectful of the fed's short-term interest rate decisions on a few occasions in fact, president obama commented to me he was criticized abroad for fed actions. >> so i had a good relationship with both of them and i think it worked well. the federal reserve that the roles are set by congress and the fed is more and more transparent over time. and it is very important the fed is accountable and transparent but the best outcomes of curve the individual interest rate is in

pursuit of those objectives to look at the long-term goals of the fed. we were very lucky presidents bush and obama were respectful of that. the treasury secretary and the other administration officials again it's a friendly relationship that during the financial crisis the treasury worked quite closely on those issues and through monetary policy. and there is left to the discretion of the fed. >> everyone would be better off it was clear to make those decisions based on the mandate and the assessment of the economy which i'm completely

confident we will do. >> do you believe in the president with long-term dangers in monetary policy? . >> and to undermine the public confidence and its responsiveness to the mandate and evolve the tradition that began with president clinton for the presidents not to comment and to shore up the independence and the nonpolitical way trying to make its best judgment with that congressional mandate that is the best kind of arrangement for president

through the fed obviously the president has a right to comment but i wouldn't worry if it continues or intensifies it could undermine confidence in the fed or the market confidence and their judgments. >> i do want to add something that people should know the fed has a very strong culture around nonpolitical activity. we are committed to achieving a goal the law gives us in a complete and non- pettit one - - political way based on perspectives and thinking and we will always do that it is very much in the dna if anybody has spent time at the fed so i want the public to be assured we have a strong culture. is not fragile or subject to being disrupted. we will always do things that way and people will have confidence in that.

>> through the mechanisms of monetary policy you spend your career looking at ways to use monetary policy that was real and during your chairmanship what might you do differently during the financial crisis using these various approaches quick. >> one of the lessons we have learned with monetary policy? . >> one of the things we learned is interest rates generally being lower around the world is the more salient risk than we thought it was 20 years ago. so dealing with that situation going forward is a greater risk. so we approached it when we

hit zero one was for word guidance with the communication that we would do in the future and quantitative easing with treasury securities and mortgage-backed securities. those were constructive. certainly the concerns over the critics expressed leading to hyper inflation and extreme outcomes was not direct. we learned how to communicate and coordinate those policies so in the future frequently there isn't in the situation of zero interest rates, we do have some tools that could be used. there are further discussions if we could change the way we approach the policy target to

make it more effective with zero interest rates. >> with that temporary price targets, but the federal reserve is doing a review of the framework and that context if it needs modification to make monetary policy work? but overall it suggests that while there is real constraint there are some tools that can be used in that circumstance. >> i agree i think they should remain in the toolkit and i think it is very constructive that the fed will undertake in

one of the things that struck me is through 2012 to have long-term interest rates that are at three.5 percent. the way that reflected the public's view with the short episodes that rates would go back up more quickly and i think we learned things from the financial crisis and to communicate more quickly so they will put that down forcefully and quickly. >> anything that you could tell about the fed contingency planning during your chairmanship?

how ready is the fed? . >> we use all of our tools to the extent appropriate and the balance sheet and i would agree that the tools that we use in a crisis generally worked. i raise concerns when we first got to the fed and i said those concerns that are raising are appropriate but we didn't see high inflation and other things. but again i echo what ben says but in fact, we are spending a whole year trying to engage with the public not just the profession but in general to explain ourselves a little bit if there are lower interest rates how will be conduct policy, or communicate and use

our tools at that inflation target is credible and the goals that were assigned so for example, 20152016 to tie in monetary policy around the world slow growth in emerging markets that parallels to what we are seeing now but also when the signal is it would not go on forever. for those two episodes can you reflect on the lessons learned for current policy? that should be internalized? . >> i think looking at this feedback with the global environment is the important

factor and it is something that monetary policy needs to take account. and with that 20152016 episode that there is spillovers and monetary policy as the fed raises rate there is expected to raise rates more quickly than those of the rest of the world then capital is attracted to the us it tends to slow global growth with those dollar-denominated debt and higher interest rates and local currencies that dip to slow growth in the rest of the world and then the feedback to

the us monetary policy and jay pointed to this in his open remarks as 2016 as an example of a situation where the us monetary policy to global financial conditions and back again to the us outlook is leading to a significant position of what the policy should be and we ended up in december 2015 when we first raised rates and the projections to participate looking for those rate increases during 2016 that was sufficiently strong but

sometimes it's difficult to predict and that's why amenable feeds back to the outlook. >> so first, in general the fed does have a big effect globally the dollar has a big effect even when countries trade with each other and international borrowing so we recognize they are powerful doing feedback on the us economy and in particular that role of last resort of those other things they did during the crisis but with those

central banks to make sure they have access to dollars to help manage the shortages of the global lender of last resort. but that paper tantrum that's where in the future we may do better. there was communication concern that when we announce the contingent and gradual slowdown in purchases, i don't think it was as much the slowdown but the inference taken as an imminent increase of short-term interest rates. it was going up even in other currencies. that just shows you that subtlety of having different tools interact and where those future rate policies would be. so what happened in that episode but again there was an

inference of policy rates go up more quickly than we intended we try to be very clear about that but in the end the message came through and the economy turned out to be amenable that we learned as few central bankers would understand to coordinate communications across different elements of monetary policy between asset purchases and rate hikes. >> so as you said now the global reserve currency makes the job more complicated what do you draw as policy ahead? . >> that temper tantrum left scars on anybody who was working in the fed at that time and that the market could

be very sensitive to the news of the balance sheet and one of the reasons why the balance sheet was supposed to be in the background gradual and unpredictable and you have two active tools going on at once. i agree so particularly after the temper tantrum there was back and forth do other countries have freedom of monetary policy? so a lot of research has been done and much of it by fed people. the sense of it is for what we can do is to be as transparent and predictable as policy a strong us economy is good for the world and with the world of the us monetary policy and other countries is exaggerated. and you can address that with

that floating exchange rate. >> with that argument, for most of that moderation that has been very successful to keep that low and to put the brakes on on the economy and unemployment gets very low but that is to help asset prices of easy money and not letting the economy heat up enough for when things are going well. so this is part of the declining labor sheriff national income is this a valid critique there is a systematic willingness and not

worry as much about the outcome outcomes? . >> in the aftermath of the financial crisis with employment outcomes and to have an open mind that the economy could go with maximum employment with stability and the issues of where inflation hits in the face of labor markets what is the natural rate of unemployment in the numbers from the fomc. and wine of the things was an aspect to these reports that although unemployment is historically low and it is

close to 50 years. and with that labor force participation to contribute to employment growth that would be inflationary and in a way to see very strong job growth because it turned out not to be inflationary and that has continued to increase. certainly that is a fair criticism. >> you mentioned on the jobs reports, how do we trust those estimates? how much do we say this is a job market and see where this

leads? . >> we need that concept because we need to know and have some sense if it's over or just right but we have to understand that there is some uncertainty around the actual location and with those inflation dynamics that relationship between changes of inflation is very weak but it's clearly still there and all the research that has been done. so we have been willing to revisit our views of the national rate and our understanding of what it is. if you look at the forecast of the fomc participants through the entire production.

, we are not acting over a certain number, we are very open-minded of what the level of the national rate and the implications. it would go too far to ignore resource constraints completely because he could get those demand - - dynamics back over time but that's the way i would think about it. >> and that phillips kurd that full and employment that has pressures with broader inflation there are two steps tightening the markets through higher wages and overall inflation we haven't seen as much of that lately. >> both the of those weekends significantly since the sixties when we were young. before you were born.

but i mentioned we had wages going up faster than productivity and inflation during the latter part of the 19 nineties expansion. so there was a link between the two wage and price inflation. wages going up is not necessarily inflationary and we know that very well we have unemployment under 4 percent at nine months inflation is under control i think that's a pretty good outcome. >> is it just flat or a certain? . >> on certain this is the endogenous phenomenon and greenspan did us a favor to anchor inflation expectations

roughly at 2 percent to formalize that target in 2012. janet and i during our terms were very supportive of economic growth and employment it was critically important but it was very helpful that inflation expectations were so well anchored and it gave us flexibility to take steps without worrying that expectations were drift off to become an immediate problem. and that inflation expectations are so well anchored and for that reason and the phillips curve is so flat that allows us to explore the range of how far unemployment can decline when necessary but you want to protect that and don't allow inflation to persistently

deviate from the target area because if you did, which i don't expect to happen, that would be costly to terms in the economy. >> with regulation so the idea of regulating the financial system, how confident are you for resilience is there anything to strengthen that? . >> and it is definitely in better shape with more capital and higher-quality capital the institution of stress test very important supervisory and

with the public understanding and to encourage better risk management in those banks and those derivatives that are standardized with a much higher margin requirements than those that are not centrally cleared. so a lot of things have happened and it is a work in progress and there is work to be done i actually think the united states so we made the system year in and year out if

you see the threat of house prices of concerns that bubble is developing, many countries have tools for the financial stability board to invoke if they were worried about the shape of a banking institution the concern would be escalating house prices from a collapse to cause a deep recession and it would put caps on loans to ratios. >> there were lots of countries doing that as well. but we actually don't have such tools in the united states and that worries me.

although if there were a problem in the systemic institution to resolve a systemically important non-bank investment non-bank holding company but then to be used during the downturn to support aig that would be disastrous at the time. so i do have some concerns. >> do you have the tools that you need? . >> i agree with janet, we don't have a lot of tools to move around in that cyclical manner so through the cycle the policies and characterized with the stress test from the

institutions and also the very high capital requirements and liquidity requirements so those are through the cycle measures. we are not strong in terms of having tools we can have often on. if there is a long history of trying to use things that doesn't survive very well but also what takes place in the financial markets with the banking system and those are not regulated and it is is a strength of the dynamism standpoint something we have worked on a lot and what we have done with the banks is a good body of work but there's more to be done and in the

capital markets to. >> stepping away from economic policy but talk about the pro- one --dash the position but my colleagues talk about allegations of aggressive behavior and harassment they have seat received tips by other senior economist so my question is what more needs to happen to the profession to be welcoming to all types of people and what mark and other institutions be doing? . >> economics has a problem we have a very low ratio of women of professional ranks and unfortunately reputation for

hostility towards women and minorities seems to be the reason why women choose not to become economist. is bad for them and the profession we are losing talent and insight. janet will follow me we work together on this. we are currently with aea conducting a survey of the membership asking people to report things that had happened to them in general or specifically if members are here or listening if you have not filled out your survey please do that. that will help to think about the next step but in general we have to work much harder to increase women's participation and economics. a small example is a 19 person committee to pick of and there

is 11 out of the 19 are female we also introduced a new job market discussion to make it unnecessary that had a lot of bad reputation and we will continue the efforts to mentor young women and minorities at the college and graduate level. unfortunately it is a long pipeline and takes a long time to put an undergraduate into a senior professor but i think it's very important for economics that we change the perception than just being unfriendly to any group of people. >> i agree that this should be the highest priority for us

over the next couple of years the aea has formed a new committee to focus on those initiatives that could be successful in improving the environment and the climate survey perhaps will have feedback to that economics departments how they compare to the profession as a whole they will get the best practices to put in place to remove the carnage as it relates to women. with the adoption recently of the code of conduct with diversity.

>> the fed is an important institution. i very much want to follow in janet's footsteps to say diversity and inclusion is a top priority for us. that kind of behavior we read about is totally unacceptable and will not be tolerated at the fed. we are committed to a diverse and inclusive environment. i strongly believe that diverse perspectives not only do you get better results, but the young people coming up are accustomed to a inclusive environment they don't want workplaces like that. i want the fed to be known as a great place for women and minorities in to work on behalf of he listened to.

>> so you both made decisions and with those standards to get tenure that is not the usual steppingstone. so what role does public service play in your own career or evolution so what do you recommend if they try to do a fellowship or one year at the cea? . >> thinking as what i would want to have part of my career as motivation to study economics and hopes i would have a chance to serve on the council of economic advisers and as a body of understanding of work that is highly

relevant so that economist can contribute to make the world a more successful place to apply that knowledge so that was part of the motivation and as we go back and forth between academia and public policy charts i found the knowledge i have gained in academia with a systematic way to analyze data and how the world works is highly relevant to design public policy which is tremendously enriching in terms of research to spend one year at the cea or longer or serving at the fed and that

you can enrich one's research so there are benefits in both directions. >> so what in the policy world makes you a better researcher? . >> it's a question of what problem showed one work on? in that regard i always think of the fact the fed in the run-up to the financial crisis having to deal with zero interest rates and thinking about what was possible in the interest rate world and to take place inside the fed are academia motivated by japan's problem so then to spoke about this in the number of speeches , that you see a real world

problem and that was available in the same situation later with ourselves so that world phenomenon motivated important research. >> you became fairly late in your career. >> yes i was an academic then i got a call from the white house to come talk about to be the board of governors at the fed. keynes famously said economist should start with useless. [laughter] and economics is not all bad is static it is supposed to be a practical field and what you are doing has no relevance at all then you should question that. with monetary policy and financial history it is an opportunity to put it to use and get the feedback i and experience and to understand

the policymaking contacts - - context. so when economics the silos are not that strong. it's not that hard for a diminishing undergraduate for the federal reserve and back and forth to have a visiting appointment at the bls or consensus to move back and forth between academic and policy wor work. it is very stimulating it gives institutional knowledge to form your analysis and that would be helpful to do whatever you want to do to get your work done.

but for those who have a strong policy interest and that type of career is feasible. >> what appeal to you about staying in washington why did you go back to harvard? . >> i had interesting opportunities. i did spend your at the board of governors and the officer to be at the ch wet chair - - janet has also done. that is one of the most interesting jobs in a - - washington to be honest you can be in the white house and work on the issues coming across the policy desk. then i was appointed chair i was overwhelmed at my opportunities. but i maintained a relationship with princeton and i still do and i still do

research and make presentations so i certainly haven't abandoned the academic life but for an economist with applied interest the ability to move across those fears is a great benefit. >> last question there are many younger scholars here with the research making plans for their careers. in terms of their agendas what would you like to see them take on that would be helpful as a fed chair? . >> i would say the integration of financial and macro economics and changing the financial conditions this is

something that there is a lot of progress to be made it is still early to work that out. >> and systemic risk to understand what gives rise to systemic risk how we can measure and protect it and what kinds of tools. this is a fertile area for research and the economics profession and the financial stability work on top of developments that i think should be high priority. >> one of the things having trouble with even after the crisis became severe we understood it was the underbelly but we didn't have

the tools of how persistent the impact would be. even as late as 2008 to forecast 7 percent but it went at 10 percent so we didn't have the tools for understanding this financial instability and the economy and a lot of progress has been made. >> but some of the most interesting issues with that monetary range politically around the world with concerns of inequality or opportunity the effect of globalization and growth and technology. oh and in the lecture we could talk about these but that is an area to better understand

the dynamics of opportunity where labor markets are changing so rapidly. >> thank you very much. [applause] [inaudible conversations]

. >> after there was a battle there was a scene with other young women as a vitality as a sign that i'm going to live forever as he would say. he would go to these hollywood parties and sometimes he would go home with his grandsons

date which was hard for the executives of viacom and cbs because he still was a controlling shareholder of these companies but yet he would do weird things. the state of new york is spending $65000 per day to keep ellis island open during the shutdown. his speech is half an hour. >> at this time the chief justice of the court of appeals and state of new york step forward to adst